Watch Out: Business Identity Theft is on the Rise

Many individuals are well aware of the risks involved in identity theft. Indeed, we’ve been hearing about the dangers of identity theft for years. However, small businesses need to be on the alert as well. Apparently, identity theft of small businesses is on the rise. If you have a small business, you need to be on the alert for identity theft.

Is Someone Stealing Your Business Identity?

One of the big worries that you might have is someone stealing your business identity to get credit. If you are an established business, someone else might try to use your good name and long years in business to get credit. Once that credit line is established, it’s then possible for the fraudster to enjoy the fruits of your labors. NPR explains the problems associated with this type of business identity theft:

[S]hady operators go after information to tap into business’ credit and reputation. They change a business’s contact information, for example, then use it to obtain credit cards or order goods, skipping town before bills arrive.

Another problem is that some business identity thieves purposely try to mimic a legitimate business. This type of identity theft involves setting up a business name that is similar to an already-existing business. The NPR article cites a problem with AAA Termite & Pest Control. This business ran into trouble with impostors in the phone book calling themselves AAA Pest Control. At first glance, it might look like the legitimate business. However, once a customer calls, the identity thief answers — and takes the business.

In some cases, this type of identity theft is just about stealing customers. In other cases, though, a sound-alike business just tries to scam the customer. The fraudster might provide shoddy work, or not even truly perform the agreed-upon services. The customer pays, and your business is blamed because the names are so similar. Some of these types of fraudsters even go so far as to adopt similar colors to what your business uses, and may even create a similar logo. Customers think they are doing business with you — but they’re not.

Your Business Reputation

In both cases, your business reputation is on the line. Your business credit can be ruined by unpaid bills opened in your name, and without your knowledge. Your reputation in the community can be sullied by negative reviews given by customers who were bamboozled by these scammers. It’s important that you be on the look out for business identity theft.

In some cases, it can be difficult to rectify the situation. If a look-alike scammer has a number in the phone book it’s too late to have the listing removed. You can ask for a cease -and-desist if someone is using your identity to set up a web site, but that can still be a difficult situation. The best you can do is try to vigorously defend your copyrights, and raise awareness of the issue.

You should also keep up with your business credit. There are business credit reports available from D&B Canada, Equifax Canada, Mercantile Credit Bureau and Groupecho Canada Inc. Periodically check your reports so that you can see whether or not new credit has been open in your business name. You need to keep on top of this information so that you know what is being done with the financial reputation of your business.